MARC Ratings has affirmed OCK Group Berhad’s (OCK) Islamic Commercial Papers (ICP) and Sukuk Murabahah Programme ratings at MARC-1IS and AA-IS/Stable, respectively. The assessment incorporates the proposed ICP upsize to RM500.0 million (from RM200.0 million), bringing the combined programme limit to RM1.5 billion.
The ratings reflect OCK’s stable operating performance and resilient tower business model, supported by long-term contracts, a strong industry track record and growth prospects from network densification, alongside credit-positive solar expansion under long-term power purchase agreements (PPA). These are balanced against elevated leverage, contract and lease renewal risks, and cross-border exposure.
OCK’s long-term tower contracts underpin stable, recurring cash flows. As of end-2025, the group owned 5,500 towers with 7,367 tenancies across Malaysia, Vietnam and Myanmar, with the tenancy ratio improving to 1.34x (2024: 1.32x) on a 1.1% y-o-y increase in tenancies. OCK also provides managed services for 53,080 towers in Indonesia and 11,300 towers in Malaysia. Regional risks, particularly in Myanmar, are mitigated by limited legacy exposure, which contributed only 11% of 18MFY2025 revenue, while Malaysia (58%) and Indonesia (21%) remain the key revenue drivers.
Customer concentration remains elevated, with U Mobile accounting for over half of tower tenancies and managed towers in Malaysia. However, its 5G rollout offers medium-term growth, with OCK positioned as one of U Mobile’s preferred 5G in-building coverage (IBC) partners. Concentration and non-renewal risks are mitigated by long-term leases, strong customer relationships, and the essential nature of tower assets.
OCK owns 29 small-scale solar farms (15.0MW) and has recently invested in a 116MW large-scale photovoltaic plant in Kedah, which generates about RM42 million in revenue annually under a 21-year PPA with Tenaga Nasional Berhad from 8 March 2022; MARC Ratings views the group’s diversified, recurring revenue base — spanning tower leasing, managed services and solar energy — as supportive of long-term cash flow stability.
Total borrowings (excluding lease liabilities) rose to RM927.1 million as at end-2025 following a RM100 million Sukuk Murabahah issuance in December 2025 for the 116MW solar plant acquisition. OCK plans to raise around RM200 million in FY2026 (ICP) and around RM400 million in FY2027 (Sukuk Murabahah) for working capital and regional acquisitions (excluding Myanmar), with borrowings projected to peak at around RM1.4 billion in FY2027 (debt-to-equity ratio: around 1.51x), subject to tender awards.
Under the base case, gross finance to EBITDA (FER) is projected to peak at around 4.2x in FY2026. Under MARC Ratings’ sensitised scenario — excluding Myanmar and Vietnam, assuming a lower EBITDA margin of 30% (base case: 37%) with debt unchanged — FER is projected to breach the 5.0x covenant at 6.2x in FY2026. Notwithstanding this, operations in both countries remain stable with consistent collections, and FER is expected to normalise to 2.7x–3.4x over FY2027–FY2030. Covenant headroom is expected to be supported by capex discipline and limited incremental borrowings, while financial flexibility is underpinned by OCK’s listed status, RM115.1 million in cash, RM275.3 million of available credit lines (excluding sukuk) as at end 2025, and diversified recurring income contributing about 61% of 18MFY2025 revenue.